Allergan, Inc. v. Actavis, Inc.

Case Name:  Allergan, Inc. v. Actavis, Inc., Nos. 14-cv-638, 14-cv-188, 2014 U.S. Dist. LEXIS 176551 (E.D. Tex. Dec. 23, 2014) (Gilstrap, J.) (Only an ANDA “received” by the FDA can form the basis for a patent infringement action.)

Drug Product and Patent(s)-in-Suit: Restasis^® (cyclosporine ophthalmic emulsion); U.S. Pats. Nos. 8,629,111 (“the ’111 patent”), 8,633,162 (“the ’162 patent”), 8,642,556 (“the ’556 patent), 8,648,048 (“the ’048 patent”) and 8,685,930 (“the ’930 patent”)

Nature of the Case and Issue(s) Presented:  Restasis is an ophthalmic product for treating dry eyes. Actavis filed an ANDA seeking approval to market a generic form of Restasis. The FDA responded to the application by identifying various deficiencies. Those deficiencies prompted the FDA to expressly state that it had not received the ANDA. Actavis responded by submitting additional information to the FDA. The FDA had not responded to this supplementation.  In the meantime, Actavis sent a Paragraph IV letter to Allergan. Allergan filed a declaratory judgment action in the Eastern District of Texas alleging that Actavis could not trigger infringement under 35 U.S.C. § 271(e)(2) or infringement of the patents-in-suit.

Actavis moved to dismiss the complaint for lack of personal jurisdiction. Actavis argued that it did not have any specific actions in Texas related to the causes of action asserted by Allergan. Actavis further asserted that it did not have continuous and systematic ties to the district simply by engaging in nationwide commerce. Allergan responded that Actavis had substantial employment and work being done in Waco, Texas, including employees manufacturing Restasis. Allergan further asserted that it would suffer harm in the district if Actavis were allowed to enter the market because it would sell the generic product in the district.

Allergan further moved for summary judgment on its declaratory judgment claim because there were no facts to support a finding that the FDA had received the ANDA application. As such, the infringement trigger in § 271(e)(2) had not occurred. Actavis asserted that simply delivering an amendment to an application was sufficient to trigger the infringement provision, regardless of whether the original application had been received by the FDA. The Court found that it had specific jurisdiction over Actavis given Actavis’ significant contacts with the State of Texas. The Court also granted Allergan’s motion for summary judgment. 

Why Allergan Prevailed:  The Court addressed two issues: (i) whether the Court could exercise jurisdiction over Actavis; and (ii) whether a patent infringement suit may be initiated by the branded company when the generic manufacturer’s ANDA had not yet been received by the FDA.

Regarding issue (i), the Court found that Actavis had state-issued licenses for sale of prescription drugs in Texas; it had contracts with wholesalers, retailers and state agencies in Texas to further such sales; and Actavis sold over $1 billion in drugs in Texas. Moreover, Allergan had a significant presence in Texas, including at least sixty nine employees who worked on Restasis. As such, Allergan would suffer harm in Texas from Actavis’ actions if Actavis were allowed to enter the market. The Court rejected Actavis’ argument that it was merely a nationwide seller and that alone could not give the Court specific personal jurisdiction over Actavis, because its actions were “intertwined with its transactions or interactions with the plaintiff or other parties.”

Regarding issue (ii), the Court found that, as the correspondence from the FDA made clear, the FDA had not received the ANDA because of the deficiencies the FDA had identified. The FDA had not issued any correspondence after the supplemental materials supplied from Actavis indicating that the FDA had received any ANDA.  Thus, the Court concluded that the FDA had not received the ANDA. The Court then determined that Actavis’ filings did not create jurisdiction under § 271(e)(2), because the statutory framework requires that the FDA receive the ANDA. The Court noted that allowing incomplete applications to trigger the infringement provision would only encourage generics to file incomplete applications to secure their first-filed position.